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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Income tax & NI calculation. Can you please show me how

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Income tax & NI calculation.
Can you please show me how much tax & NI (FY15/16) would be calculated using the following scenario.
Person employed and pays tax & NI though PAYE.
Basic salary £75,000
Taxable benefit £900 (private medical insurance provided by the company)
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Hello and welcome to the site. Thank you for your question.

A basic salary of £75,000 would be liable to tax and ni as follows
Gross = 75,000
Tax due = 19,403
Nat Ins = 4,771
Net pay = 50,826
Taxable benefit would be subject to income tax only at 40%
900 x 40% = 360
Total tax deducted (19,403+360) = 19,763
Nat insurance = 4,771

Net income including benefit in kind (50,826-360) = £50,466

I hope this is helpful and answers your question.

Customer: replied 1 year ago.

can you show me the workings for both tax & NI...

Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.

Workings for income tax
Gross pay = 75,000
Personal allowance = 10,600
Taxable pay = 64,400
first 31,785 @ 20% = 6,357
next 32,615 @ 40% = 13,046
Total income tax (6,357+13,046) = 19,403

Workings for national insurance
First 8,060 of income = no nic
next 34,320 (42,380-8,060) @ 12% = 4,118.40
next 32,620 (75,000-42,380) @ 2% = 652.40
Total national insurance (4,118.40+652.40) = 4,770.80 rounded to 4,771

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